All Forum Posts by: Ryan Thomson
Ryan Thomson has started 135 posts and replied 1464 times.
Post: House Hack #2 2020!
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $319,000
Cash invested: $15,900
This deal almost took me to FI. It was a terrifying to buy with COVID still very fresh, but I figured if I could cash flow I would be fine with any of the scary things that might have happened to the economy with shutdowns, etc.
This home had three bedrooms, a second family room, and a two-car garage. I converted the second family room into a bedroom by adding a closet ($1,000). And I converted the two-car garage into a separate 400 sq ft studio kitchenette ($25,000).
What made you interested in investing in this type of deal?
I love the ROI of a house hack since you only have to put 5% down.
How did you find this deal and how did you negotiate it?
This was during COVID and many buyers were scared and waiting to see what happened as lockdowns had just gone into effect. I actually saw this house I was riding my bike to mountain bike. The owner happened to be outside and I talked to him for a little while. We went 10k over asking and then asked them to cover the closing costs and a 3.5k check to the electrician of my choice for an electrical panel upgrade.
How did you finance this deal?
I used a conventional loan. For the garage conversion I borrowed 10k from three different friends and family members. I negotiated a different interest rate with each one. We set up an official document for our loan agreement that we signed together.
How did you add value to the deal?
I converted the 400 sqft two car garage into a studio apartment with a kitchenette and a bathroom. I also added a closet in the family room and walled it off to make a 4th bedroom.
What was the outcome?
Lots of cash flow! My PITI is $1600 and I rented three of the bedrooms for $600 and the studio for $1,000. I have since moved out and I rent 4 bedrooms each for $650 and the studio for $1500.
Lessons learned? Challenges?
Take advantage of times when people are scared. Trust yourself and the numbers you've ran. Double the time that contractors say it will take to get a job done.
Post: House Hack #2 2020!
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $319,000
Cash invested: $15,900
This deal almost took me to FI. It was a terrifying to buy with COVID still very fresh, but I figured if I could cash flow I would be fine with any of the scary things that might have happened to the economy with shutdowns, etc.
This home had three bedrooms, a second family room, and a two-car garage. I converted the second family room into a bedroom by adding a closet ($1,000). And I converted the two-car garage into a separate 400 sq ft studio kitchenette ($25,000). I funded this from three different $10,000 personal loans. I now had 5 rooms. I rented three rooms for $600 and the studio for $1,000. For a total rent of $2,800. And once again I lived for free (saving me at least $600 in rent). In the second year I rented out 4 bedrooms at $600 each and the studio for $1500. For a total of $3900. Don't forget about House Hack number one though. When I moved out of that one I rented the bedroom for $650.
Now that studio rents for $1500/month and each bedroom for $650.
What made you interested in investing in this type of deal?
I love the ROI of a house hack since you only have to put 5% down.
How did you find this deal and how did you negotiate it?
This was during COVID and many buyers were scared and waiting to see what happened as lockdowns had just gone into effect. I actually saw this house I was riding my bike to mountain bike. The owner happened to be outside and I talked to him for a little while. We went 10k over asking and then asked them to cover the closing costs and a 3.5k check to the electrician of my choice for an electrical panel upgrade.
How did you finance this deal?
I used a conventional loan. For the garage conversion I borrowed 10k from three different friends and family members. I negotiated a different interest rate with each one. We set up an official document for our loan agreement that we signed together.
How did you add value to the deal?
I converted the 400 sqft two car garage into a studio apartment with a kitchenette and a bathroom. I also added a closet in the family room and walled it off to make a 4th bedroom.
What was the outcome?
Lots of cash flow! My PITI is $1600 and I rented three of the bedrooms for $600 and the studio for $1,000. I have since moved out and I rent 4 bedrooms each for $650 and the studio for $1500.
Lessons learned? Challenges?
Take advantage of times when people are scared. Trust yourself and the numbers you've ran. Double the time that contractors say it will take to get a job done.
Post: Real Estate Investors Social @ Ivy Wild
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
Come socialize and talk about one of your favorite subjects… Real Estate.
Casual atmosphere to network and build ideas at a great Colorado Springs location. Our goal is that you'll walk away with inspiration, friends, ideas, or business partners.
Ivy Wild Tomorrow (July 12th) from 630-830pm MDT. Look for my ugly mug sitting at a table in the brewery.
Post: HELOC or other sources of cash
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
I am trying to build up cash for the next deal. Also, as a way to have extra funds should I need them.
I would like to do a HELOC above 85% on my Primary. It's a duplex.
I tried to apply for a HELOC and the rushed loan provider missed a lot of my income and didn't think I could qualify.
I have the following items to help me qualify:
- A realtor job (1.5 years) that will make me close to 6 figures
- Two rental properties that will make me close to 36k/year (NET)
- My primary home mortgage completely covered by the rental of the downstairs unit.
What ideas do you have for qualifying for a HELOC? Are there other options you would recommend for getting my hands on some cold hard cash (or credit)?
Post: Everyone and their mom is on Airbnb
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
@Dan H. Thanks for the recession anecdote. There has got to be some good data about recessions and vacation and STR rentals. I wonder where we can find that.
Post: Everyone and their mom is on Airbnb
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
Thanks @Rodney Sums! Good list of risks to look out for.
Post: Everyone and their mom is on Airbnb
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
@Natalie Schanne great point about house hacking. Such a valuable life strategy.
Post: Everyone and their mom is on Airbnb
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
Quote from @Eric Bilderback:
They need to bring back Yo Mama jokes, "Yo Mama's STR smells so bad..." Aww those were the days!
When and if there is a recession it will be interesting to see how STR's fare. I have it in my head that they are riskier then LTR but I really couldn't tell you why I believe that people who were going to go on a high end vacation will most likely go on a less expensive vacation etc. I can also see that clearing the field some for investors who have their STRs dialed.
@Bruce Woodruff I didn't refer to them as AirBNBs just for you. LOL
@Eric Bilderback I just laughed out loud. Yeah I wonder how a recession would impact people traveling for vacation. I imagine that would decline. Don't have any data to prove my point though.
Post: Everyone and their mom is on Airbnb
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
Quote from @Mike Dymski:
Quote from @Owen Hehmeyer:
@Ryan Thomson The success of AirBnB and VRBO is due to the fact that the short term lodging industry was offering only one type of easily bookable product - 95% of hotel rooms are 1 bedroom, 1 bathroom, 1 living room, 0 kitchen. It turned out that there was a huge demand for multibedroom, multibathroom, 1 living room, 1 kitchen. It is hugely inefficient to have 50 AirBnBs scattered across town, and the resulting cleaning and upkeep charges actually make AirBnBs costly and low service. If every hotel converted 20% of its floor area to suite style multibedroom, multibathroom, 1 living room, 1 kitchen style rooms and made them easily bookable, they could beat AirBnB on cost due to the huge efficiency of being under one roof and offering great on site service. If and when cities get serious about making sure every AirBnB pays hotel tax, which they should, hotels will be in an even better position to compete. I am really curious if hotels can be retrofitted to compete with AirBnB, or if it is not physically/financially feasible due to HVAC needs. Would be fascinating to see. Profits attract competition, so maybe it will happen.
Well said. I am building one.
@Ryan Thomson They will just enforce existing residential zoning.
@Mike Dymski Woah... tell us more please!
Post: Everyone and their mom is on Airbnb
#1 House Hacking ContributorPosted - Real Estate Agent
- Colorado Springs, CO
- Posts 1,498
- Votes 1,346
Quote from @Bruce Woodruff:
The STR game (Please don't call them AirBnBs :-) is still relatively new, even if we folks on here think it's an old industry. VRBO started it not all that long ago in the pig picture and AIR jumped on the bandwagon 13 years later. I see that most millennials know about them and probably frequent them more, but the older generation(s) are just beginning to realize that they can stay at a nice home with a kitchen/laundry/etc for the same price as a sterile, unfriendly hotel with zero personality.
We are getting many more older folks (50+) that admit they are brand new to the whole STR thing and they marvel at the concept, so I see this trend continuing and growing. These are the people that (generally speaking) have more money and more time.
Now to the legality/morality issue. There are some areas that will start to over-regulate and ban STRs and other that won't, some states have even stepped in to mandate the right to STR existence. I suspect an ebb/flow effect here as areas over-react and ban them, then back off and relax regs again. The moral issue is so silly I won't waste time addressing it, but supply and demand will take care of that as people migrate around the country because of business, politics, family and who knows what.
My bottom line is that there is a lot of room to grow in this game, but still best to get in early if you're gonna do it at all. And don't waste time tilting at windmills - find out where STRs are welcome and relatively un-regulated and go there and make money, while providing a great life experience for others....
@Bruce Woodruff did you just quote Donte Quixote?! "Titling at windmills". Great musings. Thanks for sharing. Would you still consider the present as "getting in early"? It feels at least like getting in later than early.